Welcome back to the 2012
season. If you're new, here's a rundown. Entrepreneurs
enter the Shark Tank looking for investors to fund their
project. The Sharks are wealthy business men and women
who have all built up companies. An entrepreneur will
come looking for a particular amount of money in
exchange for equity in the business. If the Sharks
aren't willing to give that much money the entrepreneur
goes home with nothing. The Sharks are allowed to team
up to invest.
The Sharks are:
- Barbara Corcoran: Real estate magnate
- Kevin O'Leary: Venture capitalist
- Daymond John: Built Fubu from his home
- Robert Herjavec: Technology mogul
- Mark Cuban: Some guy who sold broadcast.com for a
billion dollars. Owns the Dallas Mavericks
Now batting: Dave Mayer, Clean Bottle
Seeking $60,000 for 5% of company ($3,000,000 valuation)
He has arrived with bottle mascot in tow, along with
video of the mascot running alongside Tour de France
cyclist. Brilliant marketing, there. Dave looks to fix
the problem of not being able to reach the bottom of
your plastic bottles in order to clean them. The bottle
unscrews from the bottom as well as the top. Sales:
$750,000, 150,000 units. (If you're bad at math, that's
$5 a throw.). Profit: $118,000. Profit being put into
stainless steel bottles. The mascot is Bill Walton. NBA.
Barbara doesn't recognize Bill so Mark sets her
The Sharks are dubious at asking for 5%,
but Daymond is looking to get in. Daymond is looking for 25% equity.
Dave is looking for other offers, so Kevin puts up $100,000 for no
equity, but a 50c royalty on every bottle sold in perpetuity. Dave is
still not convinced. Barbara is turned off by the five percent. Robert
offers $60,000 for 10%. Mark: $60,000 for 8%. Robert counters $60,000
for 5%, the original request. Daymond is out, and Barbara is out because
it isn't her kind of business. Kevin has moved for the full court press,
so it is time for an ad break.
Dave counters Mark with $60,000 for 6% stake. Robert is getting
irritated at being passed over, so he excuses himself. Kevin correctly
notes that Dave is sensitive to equity valuation and that's hurting his
business. Dave decides to step out to call his father over whether to
accept Mark's offer. Dad says “don't be afraid to walk,” Mark is looking
to hold firm. Dave looks for 7%. Barbara facepalms, Daymond, Robert and
Kevin are incredulous. Mark isn't moving.
Dave decides to deal at $60,000 for six percent.
Now batting: Nancy Bush and Sue Kruskopf, My Wonderful Life
Seeking: $100,000 for 10%.
My Wonderful Life is a website where you can plan your funeral, from
soup to nuts. Fill out an online book (using Kevin O. as an example),
and designate six people to carry out the wishes of the recently
Kevin wants to know how to monetize. Prepaying for the funeral, in
effect an insurance policy. The Wonderful Life gals get a five percent
commission on each sale. They've had 7,000 users in three years, though
they have not made any money.
Mark is looking for exclusivity deals, of
which there aren't any. Kevin says: Nothing proprietary about this,
there are too many business holes. Mark is out. Daymond is out. Barbara
is out. Robert is out. That leaves Mr. Wonderful. But he's out.
No deal. No joy.
Now batting: Michael Levin for Business Ghost
Seeking $200,000 for 10%. (Valuation: $2 million)
Michael has written over 200 books; he is a ghost writer for CEOs,
sports stars, and celebrities. His team takes care of the story from
writing to publishing to marketing, charging $35,000 to $75,000 per book
and selling fifty to one hundred copies of the book. He takes in
$650,000 gross in a year.
Kevin is worried about leveraging a vanity publisher into profitability.
Kevin is out. Robert is out. Barbara is out. Daymond is out. Mark is
No deal. No joy.
Now batting: Alashe Nelson of EZ VIP.
Seeking: $150,000 for 15%.
EZ VIP is looking to become the Expedia for your VIP night out. So far,
they've netted $90k net, $250k gross in Miami alone.
Barbara is out on account of not living the nightclub lifestyle. Kevin
is out for similar reasons. Mark is out. Robert is an “old boring guy”
who will be in for $75,000 if Daymond can put up the other half. Daymond
is ready to drop the hammer and here it comes: he wants forty-five
percent for $150,000. In addition, Robert promises to never show up at
the clubs. Alashe turns it down straight away. His counter is 18% for
$150,000. Daymond is going to sweeten the deal by putting up the
$150,000 for 45% plus putting up an A-list recording artist like Pitbull.
Mark is looking to get in on the action by putting Robert out. Daymond
is going to put Robert out “like a scurvy dog.” Kevin has come back with
$150,000 for 25%. Robert has come in with Kevin, $75,000 each, technical
services and financial depth. Daymond is prepared to come down to 30%
with Mark. Daymond has put the screws on, he needs an answer. Kevin is
keeping it interesting by reducing his share to 20% with Robert.
Barbara asks Alashe, “Who are you going to have the most fun with?” He
decides to have fun with Daymond and Mark.
At the end of the night:
- Mark has six percent of Clean Bottle for $60,000, and 15% of EZ VIP
- Daymond has 15% of EZ VIP for $75,000.
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